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Gas line divide crosses party, regional lines

Posted: Monday, February 04, 2008

Lines are being drawn in the battle over the state's gas pipeline, but they're not following typical party or regional divisions.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

Traditional Alaska political lines between Democrats and Republicans are being blurred or obliterated in the increasingly controversial decision about whether to award a gas pipeline contract to TransCanada Corp., based in Calgary.

Among the sharpest divisions are within the Republican Party, especially between Gov. Sarah Palin and Senate President Lyda Green, both of Wasilla.

At the same time, two of the legislators with the starkest political differences, liberal Rep. Beth Kerttula, D-Juneau, and conservative Rep. Mike Kelly, R-Fairbanks, are both backing the process Palin and the Legislature set out in last year's Alaska Gasline Inducement Act.

ConocoPhillips Co., Alaska's biggest oil producer, has been challenging Palin's selection of TransCanada as the only qualified applicant to build a natural gas pipeline.

Green has expressed concern that ConocoPhillips said the Palin administration was not communicating with the company, a crucial player in the Alaska oil and gas business.

"They made it very clear, there was an absolute wall and there was no communication," she said.

Later, ConocoPhillips' Brian Wentzel said publicly they'd only been able to meet one or two times with the administration, but Palin disputed that.

"Once or twice?" she said. "We've met countless times."

ConocoPhillips' Wentzel said that wasn't the issue.

"It's really not about how many times we've met or discussed or seen each other or had telephone calls. The issue here is about our ability to sit down and have a two-way discussion with the administration," he said.

ConocoPhillips did not submit a proposal to compete for the inducements the state is offering to prospective gas pipeline developers, but is instead in the midst of an advertising campaign to tout its own plan to build a pipeline.

Palin said ConocoPhillips is asking to return to the closed-door process under which former Gov. Frank Murkowski tried unsuccessfully to negotiate a gas pipeline with the state's big three oil and gas companies.

Palin's AGIA process instead sets up a public process under which the producers or anyone else can publicly submit proposals to the state, as long as they meet a minimum criteria. Only TransCanada met those criteria, and the Palin administration is now reviewing its proposal to determine whether it is good for the state.

"This process has been the antithesis of the Murkowski process," Palin said.

Kerttula, also the House minority leader, said the state was committed to following through with Palin's gas pipeline plan.

"We have a process under AGIA that all the people in the Legislature but one voted for," she said.

That one legislator was Rep. Ralph Samuels, R-Anchorage, and the House majority leader.

"I wasn't a big fan of the process," acknowledged Samuels, who said he stands behind his lonely vote.

House Speaker John Harris, R-Valdez, said that even though TransCanada was the only company the Palin administration certified as complying with the demands of AGIA, they were still going to look at competing proposals.

"It is still a proposal that should be looked at by the Legislature," Harris said.

That could open the door for another rejected proposal, the plan by the Alaska Gasline Port Authority for an all-Alaska pipeline to bring natural gas to Valdez, where it would be converted to liquid and exported by ship.

Former Gov. Wally Hickel remains convinced that exporting liquefied natural gas presents the best value for Alaska, Hickel aide Malcolm Roberts told the Legislature recently.

"With our North Slope natural gas, Alaska can finally break from our colonial past," Roberts told the Senate Resources Committee.

Testifying with Roberts on behalf of the public advocacy group Backbone II, David Gottstein said the group was backing an open process, not any specific project.

"Our official position is that all legitimate proposals should be considered, and the best project, as deemed by the people of Alaska, should be the project chosen," he said.

That could put both ConocoPhillips and the port authority on the same side, and looking for allies in the Legislature to broaden the process beyond the single applicant qualified under AGIA.

• Contact Pat Forgey at 586-4816 or patrick.forgey@juneauempire.com.



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